Urstadt Biddle Properties Inc. (NYSE:UBA and UBP), a real estate
investment trust, today announced its fourth quarter and full year
financial results for the fiscal year ended October 31, 2018.
Net income applicable to Class A Common and Common stockholders
for the quarter ended October 31, 2018 amounted to $5,119,000, or
$0.14 per diluted Class A Common share and $0.12 per diluted Common
share, compared to $324,000, or $0.01 per diluted Class A Common
share and $0.01 per diluted Common share in last year’s fourth
quarter. For the year ended October 31, 2018, net income applicable
to Class A Common and Common stockholders was $25,217,000, or $0.67
per diluted Class A Common share and $0.60 per diluted Common
share, compared to $33,898,000, or $0.90 per diluted Class A Common
share and $0.80 per diluted Common share in fiscal 2017. Net income
applicable to Class A Common and Common stockholders for the year
ended October 31, 2017 includes a net gain on sale of properties of
$18.7 million related to the company’s sale of its Pavilion
property located in White Plains, NY and its Stratfield Road
property located in Fairfield, CT. Net income applicable to Class A
Common and Common stockholders for both the fourth quarter and year
ended October 31, 2017 was reduced by $4.1 million of preferred
stock redemption charges related to the company redeeming its
7.125% Series F Cumulative Redeemable Preferred Stock (the “Series
F preferred stock”) on October 24, 2017. The company replaced the
Series F preferred stock with a less expensive new series of
preferred stock that was issued in September 2017. The new lower
yield 6.25% Series H Cumulative Preferred Stock (the “Series H
preferred stock”) is saving the company $1 million per annum in
preferred stock dividends. In addition, the company is saving $1
million more in preferred stock dividends per annum as the issuance
amount of the outstanding Series H preferred stock was $14.4
million less than the redeemed Series F preferred stock.
Funds from operations (“FFO”) for the quarter ended October 31,
2018 was $12,561,000 or $0.33 per diluted Class A Common share and
$0.30 per diluted Common share, compared with $7,819,000, or $0.21
per diluted Class A Common share and $0.18 per diluted Common share
in last year’s fourth quarter. For the year ended October 31, 2018,
FFO amounted to $55,171,000, or $1.47 per diluted Class A Common
share and $1.30 per diluted Common share, compared to $43,203,000,
or $1.15 per diluted Class A Common share and $1.02 per diluted
Common share in the corresponding period of fiscal 2017. FFO for
both the fourth quarter and year ended October 31, 2017 was reduced
by the $4.1 million in preferred stock redemption charges related
to the company redeeming its Series F preferred stock on October
24, 2017 as discussed in the preceding paragraph.
Both FFO and net income for the fiscal year ended October 31,
2018 include $3.7 million in lease termination income the company
received from a grocery store tenant at its Newark, NJ property
when that tenant vacated the property prior to the end of its
lease. Both FFO and net income for the fiscal year ended October
31, 2017 include lease termination income of $2.1 million relating
to the termination of the only lease at the company’s Stratfield
Road property located in Fairfield, CT, which property was sold in
the third quarter of fiscal 2017.
At October 31, 2018, the company’s consolidated properties were
93.2% leased (versus 92.7% at the end of fiscal 2017) and 91.7%
occupied (versus 91.0% at the end of fiscal 2017). The October 31,
2018 leased percentage treats as leased, and the October 31, 2018
occupancy percentage treats as unoccupied, 65,700 square feet of
retail space (1.5% of our consolidated square footage) formerly
ground leased by Toys R’ Us and Babies R’ Us at our Danbury Square
shopping center in Danbury, CT. Toys R’ Us and Babies R’ Us went
bankrupt earlier in fiscal 2018, and this lease was purchased out
of bankruptcy from Toys R’ Us and Babies R’ Us and assumed by a new
owner in August 2018. The lease rate for the 65,700 square foot
space is $0 for the duration of the lease, and the company did not
have any other leases with Toys R’ Us or Babies R’ Us, so the
company’s cash flow was not impacted by the bankruptcy of Toys R’
Us and Babies R’ Us. As of the date of this press release, we have
not been informed by the new owners of the lease which operator
will occupy the space.
Both the percentage of property leased and the percentage of
property occupied referenced in the preceding paragraph exclude the
company’s unconsolidated joint ventures. At October 31, 2018, the
company had equity interests in seven unconsolidated joint ventures
(751,000 square feet), which were 96.3% leased (versus 97.7% at the
end of fiscal 2017).
Commenting on the quarter’s operating results, Willing L.
Biddle, President and CEO of Urstadt Biddle Properties Inc., said
“We had another strong operating quarter with FFO of $12.6 million
or $0.33 per Class A Common share, which provides strong coverage
of our current dividend level, reflecting a 82% FFO payout ratio
for the quarter on a per Class A Common share basis. The increase
in our FFO to $12.6 million this quarter represents a 5.6% increase
over last year’s fourth quarter FFO after excluding $4.1 million in
preferred stock redemption charges incurred in last year’s fourth
quarter. We are very pleased our FFO payout ratio continues to
improve, as we know our investors greatly value the safety and
consistent growth of our dividend through all types of economic
cycles. The strong operating results are a result of a number of
positive transactions completed in fiscal 2017 as well as positive
transactions in fiscal 2018. We completed the sale of our vacant
Westchester Pavilion property in March of fiscal 2017 for $57
million and re-invested those proceeds in several new properties
and other investments, and we are continuing to see earnings
improvement in our operating results as that capital is now fully
deployed. In addition, we were able to complete two accretive
financing transactions in fiscal 2017, which increased our
operating results this quarter and will continue to have a positive
impact going forward. In July 2017, the company refinanced its
largest mortgage, reducing the interest rate from 5.52% to 3.398%,
which is now saving the company over $1 million in interest expense
per annum.
Also, in October 2017, we redeemed all $129 million of our
7.125% Series F Cumulative Preferred Stock using proceeds from the
sale of the Pavilion and the issuance of $115 million of 6.25%
Series H Cumulative Preferred Stock. This reduction in preferred
stock outstanding, along with the lower coupon, is now saving the
company over $2 million per annum in preferred stock dividends. In
addition, in the fourth quarter of fiscal 2018, we refinanced, for
a ten year term, one mortgage secured by one of our unconsolidated
joint ventures, which was not due to mature until 2024 but had an
interest rate re-set next year, and two mortgages on consolidated
properties that were not maturing until mid-2019. We elected to
forward rate lock these new mortgages in advance of their maturity
at what we viewed as attractive interest rates. The new interest
rates on both of the consolidated mortgages are considerably lower
than the interest rates on the prior maturing mortgages, which will
provide the company significant savings in fiscal 2019 and
beyond.
Our operating strength buoyed by these accretive transactions
has allowed our Board of Directors to approve a per annum dividend
increase of $0.02 per each share of Class A Common and Common
stock, which continues our strong record of having raised dividends
on our Common equity for each of the last 25 years, and continues
our record of having paid a dividend on our Common equity in every
quarter of the company’s existence back to 1970.”
Mr. Biddle continued: “In fiscal 2018 and early this fiscal
year, we continued to grow our investment portfolio by making four
strategic acquisitions of properties located in the geographic
areas where we prefer to own, the suburban communities that
surround New York City. The first transaction was the completion of
a foreclosure on a note we had previously purchased at a discount
secured by a property located at 470 Main Street located in
Ridgefield, CT. The total consideration paid for the note,
including costs, totaled $3.1 million. The property at 470 Main
Street is a 24,200 square foot building with two floors of retail
and a third floor of office space. The second property we purchased
was the Tanglewood Shopping Center, located on Central Park Avenue
in Yonkers, NY. Tanglewood is a 27,000 square foot shopping center
consisting of two retail buildings. The primary building, which
fronts Central Park Avenue, one of the premier retail corridors in
Westchester County, NY, consists of approximately 22,300 square
feet, is anchored by an AutoZone and contains other national and
regional service and food tenants. The secondary building consists
of approximately 4,700 square feet and is leased to CKO Kickboxing
(a 70+ unit chain), a nail salon and a market. The property is
currently 100% leased. The third property purchased was through a
75.3% equity interest in a DownREIT of which we are the managing
member. This DownREIT, UB New City I, LLC, owns a property located
in New City, NY leased to Putnam County Savings Bank. In addition,
certain parking spaces on the property are leased to the owner of
an adjacent grocery-anchored shopping center. This investment
provides a strong yield on our invested capital, and we believe it
improves our chances of acquiring the adjacent grocery-anchored
shopping center in the future. Finally, in December 2018, we
purchased the Lakeview Shopping Center located in Brewster, NY for
$12 million, from a lender that had foreclosed its loan on the
property in 2017. Lakeview is a 177,000 square foot shopping center
anchored by a 45,000 square foot Acme Supermarket. Acme recently
executed a lease extension through 2029, and Lakeview also includes
other tenants such as Rite Aid, KeyBank and Creative Kids
Childcare. The property is 73% leased, and we anticipate making an
additional investment of up to $10 million in the next few years
for capital improvements and leasing costs to improve the shopping
center.
We continue to stay active on the leasing front and as reported
last quarter, we signed a new 40,000 square foot lease with Whole
Foods Market to anchor our Wayne, NJ property. We had not accounted
for that space as leased in previous quarters, as we were then
still required to get municipal site plan approval for a small
expansion of the shopping center that would allow us to deliver the
space to Whole Foods Market in fiscal 2019. We received municipal
site plan approval earlier this quarter, and we now include this
40,000 square foot space in our leasing metrics, which increased by
0.9% the percentage of our consolidated properties leased this
quarter. We also have four other spaces over 10,000 square feet
that are vacant in our consolidated portfolio, which collectively
represent 42% of our current consolidated property vacant square
footage. However, we do have several prospects for some of these
vacant spaces and hope to have new leasing to announce on these
spaces in the months to come.”
UBP Announces an Increase in Dividends to its Shareholders
for the Twenty-Fifth Consecutive Year
At its regular December meeting, the company’s Board of
Directors approved an increase in the quarterly dividend rate on
shares of the company’s Class A Common stock and Common stock. The
quarterly dividend rate declared for Class A Common stock was
increased to $0.275 per share and the quarterly dividend rate
declared for Common stock was increased to $0.245 per Common share,
which represents an annualized increase of $0.02 per share for the
both classes of common stock. The $0.02 dividend increase on both
the Class A Common stock and Common stock represents the
twenty-fifth consecutive year that the company has increased total
dividends to its shareholders. The Class A Common and Common
dividends are payable January 18, 2019 to stockholders of record on
January 4, 2019.
Urstadt Biddle Properties Inc. is a self-administered equity
real estate investment trust which owns or has equity interests in
85 properties containing approximately 5.3 million square feet of
space. Listed on the New York Stock Exchange since 1970, it
provides investors with a means of participating in ownership of
income-producing properties. It has paid 195 consecutive quarters
of uninterrupted dividends to its shareholders since its inception
and has raised total dividends to its shareholders for the last 25
consecutive years.
Certain statements contained herein may constitute
“forward-looking statements” within the meaning of the Private
Securities Litigation Reform Act of 1995. Such forward-looking
statements involve known and unknown risks, uncertainties and other
factors which may cause the actual results, performance or
achievements of the company to be materially different from any
future results, performance or achievements expressed or implied by
such forward-looking statements. Such factors include, among other
things, risks associated with the timing of and costs associated
with property improvements, financing commitments and general
competitive factors.
(Table Follows)
URSTADT BIDDLE PROPERTIES INC. (NYSE:
UBA AND UBP)
YEAR ENDED OCTOBER 31, 2018 AND 2017
RESULTS
(in thousands, except per share data)
Year Ended Three Months Ended
October 31, October 31,
2018 2017
2018 2017
(UNAUDITED) (UNAUDITED) (UNAUDITED)
Revenues Base rents
$95,902 $88,383
$23,740 $23,520 Recoveries from tenants
31,144
28,676 7,754 7,697 Lease termination income
3,795 2,432 5 - Mortgage interest and
other
4,511 4,069
1,044 1,096 Total Revenues
135,352 123,560
32,543 32,313
Operating Expenses Property operating
22,009
20,074 5,159 5,439 Property taxes
21,167 19,621 5,563 5,145 Depreciation
and amortization
28,324 26,512 7,037
7,070 General and administrative
9,223 9,183
2,199 2,290 Provision for tenant credit losses
859 583 185 154 Directors' fees and
expenses
344 321
77 81 Total Operating
Expenses
81,926 76,294
20,220 20,179 Operating
Income 53,426 47,266 12,323 12,134
Non-Operating Income (Expense): Interest expense
(13,678) (12,981) (3,500) (3,181)
Equity in net income from unconsolidated joint ventures
2,085 2,057 375 579 Interest, dividends
and other investment income
350 356 104
202 Gain/(loss) on sale of properties
-
18,734 -
(38) Net Income 42,183
55,432 9,302 9,696 Noncontrolling
interests: Net income attributable to noncontrolling interests
(4,716) (2,499)
(1,121) (1,048) Net income
attributable to Urstadt Biddle Properties Inc.
37,467
52,933 8,181 8,648 Preferred stock dividends
(12,250) (14,960) (3,062) (4,249)
Redemption of preferred stock
-
(4,075) -
(4,075) Net Income Applicable to Common and
Class A Common Stockholders $25,217
$33,898 $5,119
$324 Diluted Earnings Per Share:
Per Common Share:
$0.60
$0.80 $0.12
$0.01 Per Class A Common Share:
$0.67 $0.90
$0.14 $0.01
Weighted Average Number of Shares Outstanding (Diluted):
Common and Common Equivalent
9,114
9,026 9,271
9,110 Class A Common and Class A Common
Equivalent
29,513 29,503
29,606 29,547
Results of Operations
The following information summarizes the company's results of
operations for the years ended October 31, 2018 and 2017 (amounts
in thousands):
Year Ended October 31, Change Attributable to:
Revenues
2018
2017 Increase
(Decrease)
%
Change
Property
Acquisitions/Sales
PropertiesHeld in
BothPeriods(Note 1)
Base rents
$ 95,902 $ 88,383 $ 7,519 8.5% $
5,624 $ 1,895 Recoveries from tenants
31,144 28,676 2,468
8.6% 1,444 1,024 Lease termination
3,795 2,432 1,363 56.0%
(2,148) 3,511 Other income
4,511 4,069 442 10.9% (198) 640
Operating Expenses Property operating
22,009
20,074 1,935 9.6% 1,133 802 Property taxes
21,167 19,621
1,546 7.9% 833 713 Depreciation and amortization
28,324
26,512 1,812 6.8% 1,895 (83) General and administrative
9,223 9,183 40 0.4% n/a n/a
Non-Operating
Income/Expense Interest expense
13,678 12,981 697 5.4%
646 51 Interest, dividends, and other investment income
350
356 (6) -1.7% n/a n/a
Note 1 – Properties held in both periods includes only
properties owned for the entire periods of 2018 and 2017. All other
properties are included in the property acquisition/sales column.
There are no properties excluded from the analysis.
Revenues
Base rents increased by 8.5% to $95.9 million in fiscal 2018, as
compared with $88.4 million in the comparable period of 2017. The
increase in base rents and the changes in other income statement
line items were attributable to:
Property Acquisitions and Properties
Sold:
In fiscal 2017, we purchased four properties totaling 114,700
square feet of GLA, invested in two joint ventures that own four
properties totaling 173,600 square feet, whose operations we
consolidate, and sold two properties totaling 203,800 square feet.
In fiscal 2018, we purchased three properties totaling 53,700
square feet. These properties accounted for all of the revenue and
expense changes attributable to property acquisitions and sales in
fiscal year ended October 31, 2018 when compared with fiscal
2017.
Properties Held in Both
Periods:
Revenues
Base Rents
The increase in base rents for properties owned in both periods
was predominantly attributable to new leasing activity at several
properties held in both periods that created a positive variance in
base rents. This positive variance in base rents was accentuated by
our writing off of $633,000 in accrued straight-line rent in the
third quarter of fiscal 2017 relating to a tenant who had occupied
a 36,000 square foot grocery space at our Valley Ridge property.
This tenant failed to perform under its lease, and the lease was
terminated in the third quarter of fiscal 2017.
In fiscal 2018, the company leased or renewed approximately
707,000 square feet (or approximately 16% of total consolidated
property leasable area). At October 31, 2018, the company’s
consolidated properties were approximately 93.2% leased (92.7%
leased at October 31, 2018).
Tenant Recoveries
For the year ended October 31, 2018, recoveries from tenants for
properties owned in both periods, which represents reimbursements
from tenants for operating expenses and property taxes, increased
by $1.0 million. This increase was the result of increases in both
property operating expenses and property tax expense in the
consolidated portfolio for properties owned in fiscal 2018 when
compared with the corresponding prior period. The increases in
property operating expenses were related to increased costs for
snow removal, roof repairs and parking lot repairs at our
properties, and the increases in property tax expenses were related
to increases in property tax assessments.
Lease Termination Income
In April 2018, we reached agreement with the grocery tenant at
our Newark, NJ property to terminate its 63,000 square foot lease
in exchange for a one-time $3.7 million lease termination payment,
which we received and recorded as revenue in the fiscal year ended
October 31, 2018. Also, in March 2018, we leased that same space to
a new grocery store operator who took possession in May 2018. While
the rental rate on the new lease is 30% less than the rental rate
on the terminated lease, we hope that part of this decreased rental
rate will be recaptured with the receipt of percentage rent in
subsequent years as the store matures and its sales increase. The
new lease required no tenant improvement allowances or landlord
work.
Expenses
Property operating expenses for properties owned in both fiscal
year 2018 and 2017 increased by $802,000. This increase was
predominantly the result of increased costs for snow removal, roof
repairs and parking lot repairs at our properties.
Real estate taxes for properties owned in both fiscal year 2018
and 2017 increased by $713,000 as a result of normal tax assessment
increases at some of our properties.
Interest expense for properties owned in both fiscal year 2018
and 2017 increased by $51,000 as a result of an increase in
corporate interest expense on the company’s unsecured revolving
credit facility as a result of having more principal outstanding in
fiscal 2018 versus fiscal 2017. This increase was partially offset
by the recapitalizing of our largest mortgage, which is secured by
our Ridgeway shopping center, after the second quarter of fiscal
2017. The Ridgeway interest rate was reduced from 5.52% to 3.398%,
which caused a reduction of interest expense, this reduction was
partially offset by the company increasing the principal
outstanding on the mortgage from $44 million to $50 million.
Depreciation and amortization expense for properties owned in
both fiscal year 2018 and 2017 was relatively unchanged in fiscal
2018 when compared with fiscal 2017.
General and Administrative Expenses
General and administrative expense for the year ended October
31, 2018, when compared with the year ended October 31, 2017 was
relatively unchanged.
Non-GAAP Financial Measure
Funds from Operations (“FFO”)
The company considers FFO to be an additional measure of our
operating performance. We report FFO in addition to net income
applicable to common stockholders and net cash provided by
operating activities. Management has adopted the definition
suggested by The National Association of Real Estate Investment
Trusts (“NAREIT”) and defines FFO to mean net income (computed in
accordance with GAAP) excluding gains or losses from sales of
property, plus real estate-related depreciation and amortization
and after adjustments for unconsolidated joint ventures.
Management considers FFO a meaningful, additional measure of
operating performance because it primarily excludes the assumption
that the value of the company’s real estate assets diminishes
predictably over time and industry analysts have accepted it as a
performance measure. FFO is presented to assist investors in
analyzing the performance of the company. It is helpful as it
excludes various items included in net income that are not
indicative of our operating performance, such as gains (or losses)
from sales of property and depreciation and amortization. However,
FFO:
- does not represent cash flows from
operating activities in accordance with GAAP (which, unlike FFO,
generally reflects all cash effects of transactions and other
events in the determination of net income); and
- should not be considered an alternative
to net income as an indication of our performance.
FFO as defined by us may not be comparable to similarly titled
items reported by other real estate investment trusts due to
possible differences in the application of the NAREIT definition
used by such REITs. The table below provides a reconciliation of
net income applicable to Common and Class A Common Stockholders in
accordance with GAAP to FFO for three month and fiscal years ended
October 31, 2018 and 2017.
URSTADT BIDDLE PROPERTIES INC. (NYSE:
UBA AND UBP)
FISCAL YEAR AND FOURTH QUARTER ENDED
2018 RESULTS
(in thousands, except per share data)
Reconciliation of Net Income Available
to Common and Class A Common Stockholders To Funds From
Operations
Fiscal Year Ended
October 31,
Three Months Ended
October 31,
2018 2017
2018 2017
Net Income Applicable to Common and Class
A CommonStockholders
$25,217 $33,898
$5,119 $324 Real property
depreciation
22,139 20,505
5,581 5,400 Amortization
of tenant improvements and allowances
4,039 4,448
993
1,208 Amortization of deferred leasing costs
2,057 1,468
439 440
Depreciation and amortization on
unconsolidated jointventures
1,719 1,618
429 409 (Gain)/loss on sale of asset
- (18,734) -
38
Funds from Operations Applicable to Common
and ClassA Common Stockholders
$55,171 $43,203
$12,561 $7,819 Funds
from Operations (Diluted) Per Share: Common
$1.30 $1.02
$0.30 $0.18 Class A Common
$1.47 $1.15
$0.33 $0.21
Urstadt Biddle Properties Inc. (NYSE: UBA AND UBP)
Balance Sheet Highlights (in thousands)
October 31, October 31,
2018 2017 (Unaudited)
Assets Cash and Cash Equivalents
$10,285 $8,674 Real
Estate investments before accumulated depreciation
$1,118,075 $1,090,402
Investments in and advances to unconsolidated joint ventures
$37,434 $38,049 Total
Assets $1,008,233 $996,713
Liabilities Revolving credit line
$28,595 $4,000 Mortgage
notes payable and other loans $293,801
$297,071 Total Liabilities
$347,834 $328,122
Redeemable Noncontrolling Interests
$78,258 $81,361
Preferred Stock $190,000
$190,000 Total Stockholders’ Equity
$582,141 $587,230
View source
version on businesswire.com: https://www.businesswire.com/news/home/20181214005538/en/
Willing L. Biddle, CEO orJohn T. Hayes, CFOUrstadt Biddle
Properties Inc.(203) 863-8200
Urstadt Biddle Properties (NYSE:UBA)
Historical Stock Chart
From Jul 2024 to Aug 2024
Urstadt Biddle Properties (NYSE:UBA)
Historical Stock Chart
From Aug 2023 to Aug 2024